Is Federal Signal Corp. overvalued or undervalued?

As of 30 June 2025, the valuation grade for Federal Signal Corp. moved from fair to very expensive, indicating a significant shift in its market perception. The company appears overvalued, as evidenced by its P/E ratio of 32, which is notably higher than the industry average, and a Price to Book Value of 5.66. Additionally, the EV to EBITDA ratio stands at 19.33, further supporting the notion of overvaluation compared to its peers.
In comparison to its peers, Federal Signal Corp. has a P/E ratio that is significantly higher than CNH Industrial NV, which has a P/E of 19.42, and BorgWarner, Inc., which has a P/E of 11.57. This disparity highlights the premium investors are paying for Federal Signal Corp. relative to its competitors. Although specific return data is not available, the absence of a return comparison with the S&P 500 suggests that the stock may not be performing favorably against broader market indices, reinforcing the overvaluation narrative.